U.S. authorities have secretly embedded location-tracking devices in select shipments of advanced chips considered at high risk of being illegally diverted to China, Reuters reported on August 13, citing people with direct knowledge. The trackers are being used as part of ongoing investigations into potential violations of U.S. export restrictions on semiconductors.
Focus on AI Chips and Servers
According to the report, the trackers have been used in shipments involving AI servers manufactured by companies such as Dell and Super Micro, which often include chips from Nvidia and AMD. Sources familiar with the matter said the devices are typically concealed in packaging and, in some cases, discreetly embedded within servers themselves.
The measures come as the U.S. seeks to tighten enforcement of its 2022 export restrictions, which limit China’s access to advanced American semiconductors.
Building Cases Against Export Violations
Officials familiar with the initiative told Reuters that the trackers are intended to build evidence against individuals or companies profiting from illegal diversions. While such devices have long been used to monitor restricted items like airplane parts, their use in the semiconductor industry highlights Washington’s growing concern about the misuse of AI chips in China.
The exact scale of the practice remains unclear, with no confirmation on how often trackers have been deployed or when the tactic was first adopted for chip-related probes.
Evidence of Widespread Deployment
Multiple individuals active in the server supply chain confirmed awareness of trackers being discovered in shipments. In one 2024 case, Dell servers with Nvidia chips reportedly contained both large trackers—roughly the size of a smartphone—on shipping boxes and smaller ones embedded inside servers. Some resellers have shared images and videos of removing such devices, sources said.
Official Responses
The U.S. Department of Commerce’s Bureau of Industry and Security, which oversees export enforcement, is believed to be involved, alongside the FBI and Homeland Security Investigations. While the FBI and HSI declined to comment, the Commerce Department did not respond to requests for clarification.
China’s foreign ministry said it was unaware of the issue, while Super Micro stated it could not disclose security practices related to its global operations.
